jeff bezos, chief executive - kntuwp.kntu.ac.ir/hosseini/co/amazon.pdfshopping cart , stock of...

• Founded in 1994• Jeff Bezos, Chief Executive

• Started only with books

• Expanded to Music and Video Segments in 1998

• Released Kindle (1stGeneration) in 2007• Kindle Fire release in 2011

• International Growth

Introduction

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A presentation at K. N. Toosi University of Technology | Spring 2015

Mission

‘To leverage technology and the expertise of our invaluable employees to provide our

customers with the best shopping experience on the

Internet.’

Vision

‘To be earth’s most customer

centric company; to build a place

where people can come to find and discover anything they might want to buy online.’

Values

Customer Obsession

Innovation

Ownership

Frugality

About Amazon

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Objective

‘Not to discount a small number of products for a

limited period of time, but to offer

low prices everyday and apply them

broadly across our entire product

range.’

Core Value Proposition

Price

Convenience

Selection

Strategy

‘To ‘Get Big Fast’ by investing

aggressively in new product

categories and new businesses, by

spending money on brand

awareness and getting new customers.’

About Amazon

4


Amazon…

The Amazon logo was created to represent the message that it sells everything from A to Z (the arrow connects the two letters) and also represents the smile that customers would experience by shopping on the Amazon.com Web site (the arrow becomes a smile).5


Business Process

The Amazon business process is built around three main operations:

• Browsing : User looks for books available at Amazon.

• Manage account : Check content of user shopping cart , stock of seller , add and remove products.

• Shop : First browse to find products , place in the shopping basket , then complete the purchase.

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Business Model

• Amazon-to-Buyer Sale Approach• Multi level E-Commerce• Customer Tracking• it operates 7 websites that support their

business operation global and offers 20 million items for sale

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How Amazon works?

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How Amazon works?

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Amazon web services

• Elastic Compute Cloud (EC2)

• Rent computing resources by the hour• Basic unit of accounting = instance-hour

• Additional costs for bandwidth

• Simple Storage Service (S3)• Persistent storage• Charge by the GB/month• Additional costs for bandwidth

• And …11


Amazon Web Services drives these companies

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Companies Owned by Amazon

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Stickiness

Holds customers and keeps them coming back for more!

Measurement: *Time spent at a website*Number of visits per person*Number of pages viewed

How long do you stay @ Amazon ?

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Products & Services

Content

Relevance

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34

Variety

5 Speed & Delivery

1

Easy Navigation

Convenience

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Auctions & zShops

eBooks/Kindle

E-commerce Platform/

Web Services

Marketplace

OnLine Book Retailing

Partherships &

Logistic Services

Business Model Evolution

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Strategy

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Product

Amazon has built up a huge product base, and sells almost everything, including:

Kindle Books DVDs Mobile phones/tablets Gaming consoles and games Clothes for men/women and children Jewelry Gardening equipment …..20


Price

• Everyday low pricing.

• Amazon remains competitive by pricing its units below that of its competition.

• The price for the Kindle ($200) is below the iPad (Starting at $500) and priced competitively with the Nook ($250).

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Place

• a globally recognized website.

• Allows customers to purchase the products electronically through its online interface.

• The nature of Amazon’s placement makes it easy for customers to conveniently purchase its products.

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Promotion:

• Amazon.com is a household name.

• reaching customers by Internet advertisements, television commercials, and tailored email alerts.

• Amazon.com can mine their databases to gauge a … : specific shopper’s desires instantaneously tailor products to fit that

shopper’s behavior price products accordingly

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Amazon Statistics

Who visits amazon.com?Audience Demographics

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Statistics

Where are this site’s visitors located?

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Number of Amazon.com employees from 2007 to 2014

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Revenue Model

• a retail site with a sales revenue model.

• small percentage of the sale price of each item.

• allows companies to advertise their products.

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Net sales revenue of Amazon from 2004 to 2014 (in billion U.S. dollars)

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Global net revenue of Amazon.com from 2006 to 2014 (in billion U.S. $)

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Net revenue of Amazon from 2006 to 2014, by region (in billion U.S. dollars)

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Marketing Communications

1. Increase customer traffic to our web sites.

2. Create awareness of our products and services.

3. Promote repeat purchases.

4. Develop incremental product and service revenue opportunities.

5. Strengthen and broaden the Amazon.com brand name.31


Target MarketShoppers• Late Majority and Laggard Internet Shoppers• College Students• Price Conscious Shoppers• Early adapters (kindle)

Sellers• Current Low Performing Sellers• Third Party retailers• Online Sellers

Developers• Web developers32


Value chain Analysis

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SEO Analysis

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SEO Analysis

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Top sites in United States

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Amazon in Top Sites

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Amazon in Top Site

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Power of suppliers

Threat of Substitutes

Competitive Rivalry

Threat of new entrants

Power of buyer

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Competitive Rivalry

High – search engines

High –the little capital needed to start up.

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Power of suppliers

Low - standardized products

Low – global shipping has increased the amount of suppliers available.

High – specialized products and brands increase switching cost for buyers so the suppliers have higher power.

High – online shops making it easier for publishers

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Power of buyer

High –there is a large variety of online shops and comparison websites to compare best prices

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Threat of new entrants

Low –a strong brand Low – economies of scaleLow – strong experience High – Capital requirement entry is a low for online businesses

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Threat of Substitutes

High – physical stores and touch ,feel , hear factors

High – Renting products online instead of buying them

textbookflix.com and bookrenter.com

High – the internet is a global market

Low – Catalogue / mail order although t as popular still a substitute to online buying

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Competitors

Brick and mortar store

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Competitors

Direct

Competitors

• Target• Walmart• Overstock.com• Barnes and Noble• Apple (Media)• Samsung (Media)• Ebay• Netflix (Media)

Indirect

Competitors

• Google• Brick and mortar store• Third-Party Wholesale

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KSFs/Competitors

Brand Recognition

Breadth of Products

Quality Perception/Value

Breadth of Channel Coverage

Geographic Coverage

Financial Performance(POA/ROI), Profitability

Scale Indicator

Very Strong

Strong

Average

Weak

Media Segment

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Electronics/General Merchandise Segment

KSFs/Competitors

Brand Recognition

Breadth of Products



Geographic Coverage

Financial Performance(POA/ROI), Profitability

Scale Indicator

Very Strong

Strong

Average

Weak

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other Segment

KSFs/Competitors

Brand Recognition

Breadth of Products



Geographic Coverage

Financial Performance(ROA or ROI), Profitability

Scale Indicator

Very Strong

Strong

Average

Weak

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Competirors

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Economics attributes framework

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Strategies For Success

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Revenue growth of Amazon.com and eBay Inc.

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• Efficient Supply Chain and Logistics• Product availability, Breadth• Low prices• Innovative new offerings

• Kindle, Cloud, Web Services, etc.

• Ease of shopping• Strategic acquisitions and investments

• Woot.com, IMDB.com, Zappos.com, etc.

Key Successful Factors (KSF)

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Portfolio Analysis

Competitive Position

Mar

ket

Gro

wth

Rat

e

High

Hig

h

Low

Low

E-Book (Kindle)

Music downloads

Online Book Sales

Online consumer goods

Stars ProblemChildren

Cash Cow Dogs

Amazon On Demand

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What Makes Amazon Customer Service So Satisfying?

1.Customer First Culture2.Convenience3.Personalization4.Proactivity5.Trust

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Innovation

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Thank you

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